Introduction: Annually, over two million newborns die worldwide immediately after birth, mostly because of failure to initiate and sustain breathing. A significant decline in newborn deaths can be achieved by using proper essential newborn care (ENC) techniques. Competency-based education (CBE) could successfully build ENC skills. The purpose of the present study was to investigate the effect of applying CBE on Midwifery students’ knowledge and skills acquisition and retention of ENC. Methods: This quasi-experimental study recruited third-year under-graduate midwifery students (n=54). They were equally assigned to the interventional and control group. The interventional group was taught ENC by using CBE, whereas the control group was taught by using traditional methods. Students’ ENC knowledge was assessed three times using a multiple-choice question exam. The ENC skills were measured twice by using the Essential Neonatal Care Performance Checklist. Results: The intervention group exhibited significant ENC knowledge and skills, performance acquisition, and retention (p<0.001). Conclusion: CBE is a useful educational model for the acquisition and retention of ENC.